SOLUTION: The PTO is selling raffle tickets to raise money for classroom supplies. A raffle ticket costs $3. There is 1 winning ticket out of the 230 tickets sold. The winner gets a prize wo

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Question 1195582: The PTO is selling raffle tickets to raise money for classroom supplies. A raffle ticket costs $3. There is 1 winning ticket out of the 230 tickets sold. The winner gets a prize worth $64. Round your answers to the nearest cent.
What is the expected value (to you) of one raffle ticket? $

Calculate the expected value (to you) if you purchase 12 raffle tickets. $

What is the expected value (to the PTO) of one raffle ticket? $

If the PTO sells all 230 raffle tickets, how much money can they expect to raise for the classroom supplies? $
Answer by Boreal(15235) About Me  (Show Source):
You can put this solution on YOUR website!
Expected value of gain is $64(1/230)=$64/230=$0.278 or $0.28
Expected value of loss is -$3(229/230)=-$2.99
The expected value to you is -$2.71 or to the PTO +$2.71
If you purchase 12 raffle tickets, you have a 12/230 chance of winning $64 for an expected value of +$3.39
The cost to you is $36(218/230)=-$34.12, so the overall expectation is -$30.73
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The PTO will get $690 revenue-$64 cost of prize=$626.